An EPQ model with setup cost and process quality as functions of capital expenditure
نویسنده
چکیده
This paper considers an economic production quantity (EPQ) model with imperfect production processes, in which the setup cost and process quality are functions of capital expenditure. The mathematical model is derived to investigate the effects of an imperfect production process on the optimal production cycle time when capital investment strategies in setup reduction and process quality improvement are adopted. An efficient procedure is developed to find the optimal production run length, setup cost and process quality. Finally, a numerical example is provided to illustrate the theoretical results. Some managerial implications are also included. 2006 Elsevier Inc. All rights reserved.
منابع مشابه
EPQ model with depreciation cost and process quality cost as continuous functions of time
Extensive research has been devoted to economic production quantity (EPQ) problem. However, little atten-tion has been paid to problems where depreciation cost and process quality cost must be considered, simulta-neously. In this paper, we consider the economic production quantity model of minimizing the annual total cost subject to depreciation cost and process quality cost, where depreciation...
متن کاملAn Integrated Inventory Model with Controllable Lead time and Setup Cost Reduction for Defective and Non-Defective Items
In this paper, the study deals with the lead time and setup reduction problem in the vendor-purchaser integrated inventory model. The cost of capital (i.e., opportunity cost) is one of the key factors in making the inventory and investment decisions. Lead time is an important element in any inventory system. The proposed model is presents an integrated inventory model with controllable lead tim...
متن کاملA New Cost Model for Estimation of Open Pit Copper Mine Capital Expenditure
One of the most important issues in all stages of mining study is capital cost estimation. Determination of capital expenditure is a challenging issue for mine designers. In recent decade, quite a few number of studies have focused on proposing estimation models to predict mining capital cost. However, these efforts have not achieved to a predictor model with reliable range of error. Both of ov...
متن کاملAn Economic Production Quantity Model for Defective Items with Sales Return Service, Scrap Items and Rework
In this model, we establish an inventory model to determine the optimal inventory replenishment scheme for the economic production quantity (EPQ) model for imperfect, deteriorating items with sales return service under multiple production and rework setup. In one cycle, production process can produces the products in m production setups and reworks the defective items in one rework setup. The c...
متن کاملDeveloping EPQ models for non-instantaneous deteriorating items
In this paper, the classical economic production quantity (EPQ) model is developed for non-instantaneous deteriorating items by considering a relationship between the holding cost and the ordering cycle length. Two models are developed. First, the proposed model is considered when backorders are not permitted and this condition is waived for the second case. The cost functions associated with t...
متن کامل